ALDI to sell the first product with a carbon footprint label – will other businesses be forced to follow?

Australian manufacturers and businesses may soon have to look at calculating the carbon imprint of their products, processes and services, as the first product with a carbon footprint label in Australia is announced.

Discount supermarket chain store ALDI announced yesterday they would be adding a label to olive oil showing its carbon footprint at the end of the year.

ALDI is working with environment group Planet Ark as the first Australian businesses to implement the Carbon Reduction Label, which informs consumers of the total carbon footprint of a product, from raw materials and manufacturing right through to disposal or recycling of packaging.

Diane Mann, who runs the Carbon Reduction Label program at Planet Ark, says that since ALDI’s announcement yesterday they have received multiple calls from companies who have been considering introducing the label to their products and want to go ahead.

“The announcement of carbon labeling in Australia will certainly encourage other businesses,” she says.

“It can apply to awhole range of products and services. Companies can show not only that they measure the carbon footprint but that they’re committed to reducing it.”

“There are many organisations that have already started this work and I think it will gather a lot of momentum in business,” she says.

But there are concerns surrounding the processes and costs of measuring the environmental impacts products for the manufacturer and any business in the supply chain.

Kate Carnell, CEO of Australian Food and Grocery Council, says ALDI’s announcement is a positive one but that there’s a range of factors to consider before we’ll see this practiced across the board.

“It’s an introduction of one label on one product,” she says. “Olive oil has a single ingredient. There are lots of products that are a lot more complicated than olive oil.”

The measuring process is rigorous and will be quite costly.

“It’s not just the manufacturing environmental impact, it’s the farming and the transport impact and the transport to market and a whole range of things that have to go through the process to calculate carbon emissions,” says Carnell. “This is not inexpensive.”

Many are worried these costs will inevitably flow on to end price for consumers.

“You can see that the cost of this could be significant for manufacturers and at the end of day that has capacity to impact on price,” says Carnell.

Mann disagrees and says carbon reduction labels are a win/win for business and consumers.

Many businesses have already done this work so cost should not be a barrier,” she says.

“Businesses can educate their customers and also show they are dedicated to reducing carbon emissions.”

“It’s good for business and good for consumers. ALDI has said there will be no change to the price and there’s no reason to believe that any other products will have a change,” she says.

And research shows consumers want this information, with a recent Green Shopper Report showing 80% of people think about the environment when they’re shopping.

Independent research conducted for Planet Ark found 60% of Australians would be more likely to purchase a product displaying the Carbon Reduction Label.

While the labeling on products will not be compulsory in Australia, if consumers start to expect this kind of information, manufacturers and retailers will have to provide it, at their own cost.

“More and more consumers will be looking for information on carbon footprints. The carbon footprint information will have to come from the manufacturers,” says Carnell. “The challenge on this is to make sure we do it in a way that is cost-effective and won’t affect that price of the product.”

“We have to look at what would work best in Australia and possibly think about other things like water, biodiversity, packaging, and look around the world at what’s working and come up with an approach that is accessible and useful for consumers,” she says.

“The good news is that in Australia, the manufacturers, the retailers and the stakeholders are all sitting down together and looking at the way we can do this that is cost-effective and efficient for their businesses and the consumer,” she says. ‘There’s a high level of co-operation in Australia.”